Everyone loves getting a tax refund, but not everyone knows how to maximise it. If you're an individual taxpayer, you might be wondering what you can do to increase your chances of getting a bigger refund this year. Below, we'll share some tips and tricks on how to boost your tax refund.
Understand the tax system
The first step to getting a bigger refund is to understand how the tax system works. Australia has a progressive tax system, which means that the higher your income, the more tax you pay². You can earn up to $18,200 in a financial year and not pay tax. This is known as the tax-free threshold and after which, the tax rates kick in. The tax rates vary depending on whether you are a resident or a non-resident for tax purposes, and whether you are a working holiday maker or not. You can use the ATO's simple tax calculator or income tax estimator to find out how much tax you need to pay based on your income.
Claim deductions and offsets
One of the best ways to reduce your taxable income and increase your refund is to claim deductions and offsets for expenses that relate to your income. Deductions are amounts that you can subtract from your income before you calculate your tax, while offsets are amounts that you can subtract from your tax after you calculate it. Some common deductions and offsets that you may be able to claim include:
- Work-related expenses, such as car expenses, travel expenses, clothing expenses, home office expenses, self-education expenses, tools and equipment expenses, etc.
- Charitable donations, if they are made to a registered charity and you have a receipt
- Personal superannuation contributions, if they are made from your after-tax income
- Medical expenses, if they exceed a certain threshold and relate to specific conditions
- Low income tax offset, if your taxable income is below a certain amount
- Senior Australians and pensioners tax offset, if you are eligible for an Australian Government pension or allowance
- Franking credits, if you receive dividends from Australian companies that have paid tax on their profits
To claim deductions and offsets, you need to keep records of your expenses and income, such as receipts, invoices, bank statements, etc. You also need to make sure that the deductions and offsets are relevant to your income and that you are entitled to them under the law.
Track all those expenses throughout the year with the Gotax Deduction Grabber. Easy to use and fits nicely on your phone. Track and record your tax deductions anywhere and at anytime.
Use a professional service
Another way to boost your tax refund is to use a professional service like GoTax Online. GoTax Online is an online tax service that helps you lodge your tax return quickly and easily. GoTax Online has a team of qualified and experienced tax agents who can help you with your tax affairs and maximise your refund. GoTax Online also offers:
- A secure and user-friendly platform that allows you to lodge your return anytime and anywhere
- A low fee of $15 for their Quick Return and $55 for their normal return.
- A fast turnaround of your refund within 10 business days, sometimes even sooner.
- A guarantee of accuracy and compliance with the ATO, based of the information supplied.
- A friendly and helpful customer support team